You Gain Convenience When Using a File Sharing Website But You Can Lose Legal Protections

Traditional offices for many businesses are a thing of the past so information needs to shared more often and more widely. Employees may work from their homes and work that’s outsourced to independent contractors could be done in a business’ home city or on another continent. Businesses may also want to share documents with customers, prospective customers and contractors online for easy access. This method of doing business often involves the use of file sharing sites like DropBox or Google Drive. While this may be very convenient it can also result in the loss of legal protections if not done correctly.

“Privilege” is an exception to the rules of evidence when it comes to what can or cannot be used as evidence in litigation. An example is attorney-client privilege, which covers documents or conversations between a client or potential client and an attorney. Depending on what was said or written by whom, when, to whom, that may not be admissible, but it must be communicated in private. A conversation between a client and an attorney behind closed doors in an office may be privileged while the same conversation in a busy restaurant may not be.

Earlier this year a judge in a Virginia federal court in the case of Harleysville Insurance Co. v. Holding Funeral Home, Inc., ruled that Harleysville waived its right to privilege in a lawsuit when one of its employees uploaded documents to an unprotected file sharing site. The judge wrote that by uploading what otherwise would’ve been confidential documents to a site that was accessible by anyone with access to the hyperlink was like leaving them on a public bench for anyone to come along and take a look.

This happened in the context of the plaintiff, Harleysville, trying to prevent the defendant’s attorney from representing his client, the funeral home. The insurance company sued for a declaratory judgment stating it didn’t need to pay claims relating to a fire.

Because of the actions of one of plaintiff’s employees defense counsel had access to Harleysville’s entire claims file and Harleysville wanted the attorney thrown off the case because of unauthorized access to privileged matters. The insurance company filed a legal action to get a declaratory ruling it need not pay claims related to a fire, which the company claims was started by the funeral home.

• An insurance investigator uploaded video surveillance footage of the scene onto a file sharing website and he sent an email containing a hyperlink to the site to the National Insurance Crime Bureau (NCIB) so they could access and download the video. The investigator later uploaded the entire investigation’s casefile onto the site.
• Harleysville conceded anyone using the hyperlink had access to the files and the information stored there. It was not password protected. The company also conceded anyone with internet access could have accessed the site by typing in the URL address in a web browser.
• In the course of litigation the defendant’s attorney subpoenaed NCIB to produce any files on the case. The attorney received a copy of the email from Harleysville, he typed in the URL and viewed the files sent by Harleysville to the file sharing site. He also shared the information with his client.

The trial court denied Harleysville’s motion to have the attorney removed from the case.

This is a reminder that some information is more important than others and how it’s handled can affect your company’s legal rights and interests.

• If the information confidential or sensitive in any way and there is any question about whether information you may sharing has some private or sensitive information, avoid uploading it to a file sharing site.
• If you are using such a website, use a password, whether or not the files or the information in them could be confidential or not.
• Think about other, practical alternatives to a file sharing site. There may be a secure file sharing tool that can be used to easily and safely share documents with others.
• At issue in this case were documents involved in a legal matter but this issue can come up in other contexts. If you have and share a great deal of sensitive information you need to use great caution before sharing any information in an unsecured forum. This could include personal information about employees and customers, financial information and trade secrets.

Before you use that file sharing site or in some other way provide others access to confidential information, think about who may get access in the future in some unintended way, and be very cautious about who sees what and how.

If you have any questions or concerns about maintaining information private in order to protect the legal rights and finances of your company, contact our office so we can talk about the information and steps you can take to avoid future problems.